In 2008, When a Recession Started, the Growth of Government

question 46

Multiple Choice

In 2008, when a recession started, the growth of government expenditures on goods and services doubled compared to its growth in 2007. According to the aggregate demand theories of the business cycle

• A) government expenditure was at least a partial cause of the recession.
• B) government expenditure was not a cause of the recession.
• C) government expenditure was definitely the cause of the recession.
• D) None of the above answers are correct because aggregate demand theories of the business cycle focus only on investment and consumption expenditure.

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Definitions:

Inventory

The total amount of goods or materials held in stock by a company or business.

Original Value

The initial monetary worth of an asset or investment at the time of its purchase or acquisition.

Tangible Assets

Physical and measurable assets owned by a business, such as machinery, buildings, and inventory, as opposed to intangible assets like patents or copyrights.

Inventory

The total amount of goods and materials held by a company in stock, awaiting sale or use in production.